Report Outlines New IT Trade Barriers

By Juliana Gruenwald

A report unveiled on Wednesday says that foreign governments are developing a variety of ways--from requirements that data must be stored locally to rules instituting their own technology standards--to try to keep U.S. and other foreign tech firms from doing business in their countries.

The report from the Business Software Alliance outlines five examples of what it describes as new trade barriers being erected by foreign governments, such as China, India, and Russia, that harm foreign-tech companies. They include the imposition of mandates related to what products government agencies can buy that favor domestically owned or produced products. Other restrictions include the imposition of domestic technology standards that favor domestic firms; restrictions on the use of foreign security products; requirements that data be stored locally; and tariff barriers imposed by some countries on IT products.

BSA and others say they worry that these new restrictions will harm the growth of new technologies, such as cloud computing.

"Protectionism is not new, but the scale and scope and pattern we're seeing is unprecedented," BSA President and CEO Robert Holleyman said at a briefing on the report.

Cheri McGuire, Symantec's vice president of global government affairs, cited one issue her company is facing in China, where the government has instituted security regulations that bar large companies and government agencies from buying foreign IT security products.

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To deal with these new barriers, the report recommends several actions. One is including provisions in trade agreements that would block countries from imposing IT barriers and enforcing existing trade agreements. Congress and the Obama administration need to "use every mechanism available to develop bilateral, multilateral, and regional trade discussions over these markets and ensure there is a level playing field for American inventors to do business," Holleyman said.

The Office of the U.S. Trade Representative has pushed to restrict such barriers in its negotiations over the Trans-Pacific Partnership free-trade agreement with a group of Asia-Pacific countries.

House Ways and Means Trade Subcommittee Chairman Kevin Brady, R-Texas, said that the report "confirms what we have been hearing from a growing chorus of businesses throughout the last two years as IT companies face very ... subtle targeted and unfortunately very damaging trade barriers" around the world.

Although Brady pledged to work with the Obama administration to try to enforce existing trade agreements and to address the problem in new pacts, he didn't offer any legislative solutions on the issue.

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